Sempra (SRE): BCG Matrix [Dec-2025 Updated]

You're digging into Sempra's late-2025 strategy, and honestly, the Boston Consulting Group Matrix paints a clear picture of aggressive capital recycling: the massive growth engines like Sempra Texas Utilities (Oncor), backed by a $36 billion capital plan, and the newly sanctioned Port Arthur LNG Phase 2 are the undeniable Stars, driving that projected 7% to 9% EPS growth. These high-growth plays are being funded by divesting the non-core Ecogas México, which clearly functions as a Dog dragging on earnings, while the stable, dividend-supporting California utilities remain the essential Cash Cows. The real strategic question mark rests on projects like the Cameron LNG Expansion, which require huge capital commitments but haven't yet secured their Final Investment Decision, so you'll want to see exactly where Sempra places its next big bet.

Background of Sempra (SRE)

You're looking at Sempra (SRE) right as the company is executing a major strategic pivot, moving decisively toward its regulated utility businesses. As a seasoned analyst, I see this as a fundamental shift in their risk/reward profile. Sempra operates across three primary segments: Sempra California, Sempra Texas Utilities, and Sempra Infrastructure.

The near-term focus for capital deployment in 2025 is heavily weighted toward the regulated side. Sempra outlined a $13 billion capital investment plan for 2025, with more than $10 billion earmarked for its U.S. utilities. This aligns with their record five-year capital plan, spanning 2025 through 2029, which totals approximately $56 billion; over 90% of that massive spend is dedicated to the utility assets in Texas and California.

Sempra Texas Utilities, primarily Oncor, is clearly the engine for near-term growth and investment. Oncor is advancing a $36 billion five-year capital plan, which is a 50% increase over its previous plan, driven by massive load growth, including from data centers. By the second quarter of 2025, Oncor reported a 40% jump in active transmission interconnection requests compared to the prior year. Management is making it clear they want over 50% of Sempra's earnings to come from Texas by 2030.

Meanwhile, Sempra California is also seeing investment, with its utilities like San Diego Gas & Electric Company (SDGE) being awarded an estimated $600 million in new projects under the state's latest transmission plan. This push into regulated assets is intentional; management projects that these regulated businesses will account for a larger percentage of total earnings following planned asset sales.

The Sempra Infrastructure segment, which houses the LNG export projects, is undergoing a portfolio simplification. The company is actively working to sell a minority stake in Sempra Infrastructure Partners and its Ecogas unit, with both transactions targeted to close by mid-2026. This move comes as the Infrastructure segment saw a 75% year-over-year decline in earnings in Q2 2025, highlighting the risks associated with unregulated ventures compared to the stability of the regulated utilities. Still, the segment is pushing forward on Port Arthur LNG Phase 2, targeting a Final Investment Decision (FID) in 2025 and having already secured a 20-year offtake agreement for 1.5 MTPA with JERA.

Financially, Sempra affirmed its full-year 2025 adjusted Earnings Per Share (EPS) guidance range of $4.30 to $4.70, and it expects $4.80 to $5.30 for 2026. The company reiterated its long-term EPS compound annual growth rate target of 7% to 9% through 2029. For context, the second quarter of 2025 saw adjusted EPS of $0.89 per share. As of late 2025, the company's market capitalization stood at $59.36 billion, with reported revenue at $13.71 billion.

Sempra (SRE) - BCG Matrix: Stars

You're looking at the engine room of Sempra's future growth, the Stars quadrant. These are the business units operating in markets that are expanding rapidly, and Sempra currently holds a strong position within them. Honestly, these assets demand significant capital to maintain their lead and fund expansion, which is why they often break even on cash flow-they are reinvesting everything to capture more market share before the market matures. For Sempra, Sempra Texas Utilities, primarily through Oncor, fits this profile perfectly in the high-growth Texas energy market.

Oncor's current trajectory is being fueled by massive infrastructure spending and unprecedented demand signals. Here are the key figures driving its Star status:

• Sempra Texas Utilities (Oncor) is backed by a $\sim$$36 billion 5-year capital plan.
• Oncor's interconnection queue shows $\sim$80 GW of potential load, largely from data centers, signaling explosive future demand.

Also in the Star category is the major expansion at Port Arthur LNG Phase 2. This project reached its Final Investment Decision (FID) in September 2025, cementing Sempra's commitment to expanding its global LNG export capacity. This is a significant cash deployment, but one aimed at securing long-term, high-growth revenue streams. The scale of this expansion is substantial, adding 13 Mtpa (million tonnes per annum) of capacity on a $\sim$$14 billion investment.

To put the investment scale of these high-growth areas into perspective, look at the capital deployment and expected returns:

This segment, anchored by Oncor's regulated growth and the strategic LNG build-out, is the primary driver for Sempra's projected long-term adjusted EPS growth rate of 7% to 9% through 2029. If Sempra successfully executes these massive projects, they are definitely on track to transition these Stars into future Cash Cows as the associated markets mature and growth moderates.

Sempra (SRE) - BCG Matrix: Cash Cows

The regulated utility operations, primarily Sempra California (SDG&E and SoCalGas), represent the core Cash Cow segment for Sempra. These businesses operate in mature, geographically concentrated markets where competitive advantage is established through regulatory approval and essential service provision. They generate highly reliable cash flows, which are critical for corporate stability and shareholder returns.

Sempra California (SDG&E and SoCalGas) serves approximately 25 million consumers within stable, regulated territories. This segment's financial performance is directly tied to the rate base growth and approved revenue requirements set by the California Public Utilities Commission (CPUC). While the CPUC process limits the upside potential compared to unregulated ventures, it simultaneously ensures a predictable return on invested capital, which is the hallmark of a strong Cash Cow.

The commitment to maintaining this stable base is evident in the capital allocation strategy. For the 2025-2029 period, over 90% of the total capital plan, which amounts to a record $56 billion, is directed toward these regulated U.S. utilities, ensuring rate base stability and infrastructure support. Focusing on 2025 specifically, the capital plan targets an investment of roughly $13 billion, with over $10 billion allocated toward the growing U.S. utilities (Sempra California and Sempra Texas) (Source 14).

This cash generation directly supports the company's commitment to shareholders. Sempra has achieved a 15 consecutive year dividend growth streak, a testament to the reliable cash flow from these assets (Source 12). The current quarterly dividend per share is $0.65, equating to an annual dividend of $2.58 (Source 12). The payout ratio sits at 74.86% of earnings, indicating a significant portion of earnings is returned to investors (Source 12).

Investments here are focused on efficiency and compliance rather than aggressive market share expansion, which aligns with the Cash Cow strategy. For instance, the CPUC-adopted Post Test Year (PTY) revenue requirements for 2025 reflect this controlled growth environment:

The strategy is to invest in supporting infrastructure to maintain or improve efficiency, thereby maximizing the cash flow extracted from the existing high market share. This includes significant spending on grid hardening and safety measures, such as the $154.5 million annual budget authorized for SDG&E's electric line undergrounding and other wildfire mitigation efforts (Source 8).

The focus on these regulated assets is a deliberate strategic pivot for Sempra, aiming for earnings predictability. The regulated utility segments are expected to provide a robust buffer against volatility seen in other parts of the business, such as the Infrastructure segment, which saw a 75% year-over-year decline in earnings in Q2 2025 (Source 13).

Key characteristics supporting the Cash Cow classification include:

• Dominant market share serving $\sim$25 million consumers.
• 15 consecutive years of dividend increases (Source 12).
• Over 90% of the 2025-2029 capital plan allocated here (Source 3, 9).
• Current quarterly dividend of $0.65 per share (Source 10).
• CPUC-approved revenue requirements ensure a stable return mechanism.

The management's action is to invest to maintain productivity, as seen by the reaffirmation of the long-term EPS growth target of 7% to 9% (Source 7), largely underpinned by these stable utility investments.

Finance: draft 13-week cash view by Friday.

Sempra (SRE) - BCG Matrix: Dogs

You're looking at the parts of Sempra that aren't driving the core growth narrative right now, the units that tie up capital without delivering stellar returns. In the BCG framework, these are the Dogs, and for Sempra in 2025, Ecogas México fits squarely here.

Ecogas México has been clearly identified as a non-core asset, and Sempra is actively moving to divest it to simplify the overall business model. This planned sale is a key component of the company's capital recycling program, designed specifically to free up cash to fund higher-growth investments within the U.S. utility operations in Texas and California. Honestly, when a business unit requires management to take specific accounting actions because it's marked for sale, it signals a low strategic fit.

The financial drag from this segment, even before a final sale, is measurable. For the six months ended June 30, 2025, the segment was a drag on earnings, with a $(89) million impact from foreign currency and inflation on monetary positions in Mexico. This is a clear example of how currency volatility in non-core international assets can erode reported earnings, even as the company focuses on stable, regulated U.S. returns.

Expensive turn-around plans are generally avoided for Dogs; the strategy here is divestiture, not rehabilitation. The low strategic fit with Sempra's stated goal of becoming a utility-focused growth business makes this move logical. You can see the immediate financial consequence of this strategic decision in the reported figures, which is why management is moving to exit.

Here are the key metrics associated with this asset being categorized as a Dog:

The decision to sell is directly tied to funding the larger capital plan. Sempra's overall five-year capital expenditure program is set at $56 billion, with a significant portion earmarked for U.S. utilities. The proceeds from this divestiture, along with a minority stake sale in Sempra Infrastructure Partners, are intended to reduce the need to issue new common stock to finance these domestic infrastructure projects.

The characteristics that place Ecogas México in the Dog quadrant include:

• Non-core status relative to the primary U.S. utility focus.
• Exposure to foreign currency and inflation volatility.
• Active process initiated for divestiture.
• Low market share in the context of Sempra's total enterprise value.
• The asset is a candidate for divestiture, not further investment.

For you, the analyst, this means you should model the segment's contribution to earnings as declining or zeroed out as the sale progresses, focusing your valuation efforts on the regulated U.S. assets which are the Stars and Cash Cows. The Q2 2025 results showed a $(97) million impact from foreign currency and inflation for just the three months ended June 30, 2025, highlighting the near-term volatility you're moving away from. That's a lot of noise to filter out. Finance: draft the final 13-week cash flow projection incorporating the expected closing timeline for the Ecogas sale by Friday.

Sempra (SRE) - BCG Matrix: Question Marks

You're looking at the Sempra (SRE) assets that are currently burning cash to secure a future, high-growth market position. These are the Question Marks-projects in rapidly expanding markets, like global Liquefied Natural Gas (LNG) export, but where Sempra Infrastructure has not yet established a dominant market share, or where the asset base is still small relative to the utility core.

These units demand heavy investment now, hoping they mature into Stars. If they fail to gain traction quickly, they risk becoming Dogs, which is a real risk in capital-intensive infrastructure development.

Here's a breakdown of the key Sempra Infrastructure and Renewable assets fitting this profile as of 2025:

• Cameron LNG Expansion: A potential high-growth project on the Gulf Coast, but its Final Investment Decision (FID) is still pending for the expansion phase, though FERC granted an extension until March 16, 2033, to complete construction.
• Vista Pacifico LNG Terminal: An early-stage, high-potential project in Mexico that has not yet secured FID or full commercial de-risking, though commercial terms for long-term gas supply were reached with CFE earlier this year.
• Utility-scale Renewable Energy Portfolio: Currently a small portion of the overall business, with approximately 1,044 MW of fully contracted operating capacity as of Dec. 31, 2024.

These projects require significant capital outlay before they generate meaningful returns. Take the recently sanctioned Port Arthur LNG Phase 2, for example. This project, which received its FID in September 2025, is a prime example of a Question Mark needing massive cash infusion now for future payoff.

Here's the quick math on the Port Arthur Phase 2 commitment:

The strategy here is clear: Sempra Infrastructure is betting heavily on global LNG demand. The Port Arthur Phase 2 expansion will double the terminal's export capacity to 26 Mtpa once both new trains are operational. Still, the market share is not yet locked in, and the cash burn is high until 2030 and 2031.

For the Mexican assets, the path is similar but less defined on timing:

• Vista Pacifico LNG Terminal capacity is projected around 3.5 Mtpa.
• First exports from Vista Pacifico are targeted for 2029.
• Cameron LNG Expansion (Phase 2) was planned to add 6.75 Mtpa capacity.

You need to watch the FID decisions closely; they are the gatekeepers for turning these cash-consuming Question Marks into revenue-generating Stars. If onboarding takes too long, the market growth could slow, and these assets defintely risk becoming Dogs.

Finance: draft 13-week cash view incorporating the $14 billion Port Arthur Phase 2 commitment by Friday.